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VW Sets Aside $7.3B for Worldwide Recall

What began as an effort to skirt U.S. emissions standards has exploded into a global crisis for Volkswagen. Initial reports indicated VW rigged 500,000 vehicles to emit lower harmful chemicals during testing, and now the auto manufacturer has admitted that the emissions scandal could affect 11 million vehicles worldwide.

So what exactly happened? And could your Jetta wagon or Rabbit convertible be recalled?

(Not So) Clean Diesel

For years, VW has been touting its Turbocharged Direct Injection (TDI) engines as "Clean Diesel" -- more fuel efficient and with fewer harmful emissions than other engines -- and the TDI had won multiple "Green Car of the Year" awards. (As of this writing, VW.com/features/clean-diesel returns a 404 error.)

But it turned out VW was merely gaming the system. According to the EPA, the car company installed software in its TDI vehicles that could detect when the car was undergoing periodic state emissions testing, and the software would only engage the vehicles' full emissions control systems during testing. The rest of the time, the controls would be turned off, and the clean TDI engines would be spewing 40 times the amount of pollution allowed under the EPA's Clean Air Act.

Dude, Where's My Car Gonna Go?

According to the EPA, Volkswagen admitted to the use of a "defeat device" and has begun recall procedures affecting some 482,000 VW and Audi vehicles from model years 2009 to 2015. Specifically, the affected models are the 2009-15 Volkswagen Jetta, 2009-15 Beetle, 2009-15 Golf, 2014-15 Passat, and 2009-15 Audi A3. If you own one of these cars, you can probably expect a recall notice soon.

As the scandal broke in the United States and VW's stock plummeted, other countries, most notably France and Germany, began their own investigations. Volkswagen then told investors that internal investigations indicated that the emissions issue could impact more than 11 million vehicles and the German car company would set aside $7.3 billion to cover the costs of recalls and damage control. Experts predict it could take years for VW to rebuild its reputation.